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Special Needs Trust Fairness Act of 2015 (H.R. 670) (S.349)

Background:

In order to reduce the severity of high medical costs, Medicaid allows parents, grandparents, and guardians of a child with special needs to set up an account devoted to paying for disability-related costs. Third-party SNTs allow guardians to leave money or property to their child without jeopardizing the child’s eligibility to receive Medicaid or Supplemental Security Income (SSI) benefits. Typically, in order to qualify for government programs, the individual must have less than $2,000 in his or her personal assets. SNT accounts are meant to help supplement the costs of disability without causing the individual to lose federal benefits.

The money or assets in Special Needs Trusts can be set aside to pay for the child’s education, transportation, medical expenses, technology, recreation services, vacations, and more. SNTs are important when federal program benefits are not enough to cover the medical costs to lead a comfortable life.

In 2015, the Special Needs Trust Fairness Act was introduced to amend Medicaid to allow individuals with disabilities to set up SNTs with their own assets, otherwise known as first-party SNTs. This would allow an individual with a disability to create their own SNTs as both the donor and the beneficiary.

The problem with our current legislature is that anyone who is disabled, intellectually or not, is unfit to manage his or her own assets. This forcibly restricts the individual’s ability to live independently, even if they are fully capable. The Special Needs Trust Fairness Act would simply allow individuals with a disability to set up SNTs on their own behalf.

Status:

This bill was reported by Senators Chuck Grassley (R-IA) and Bill Nelson (D-FL) to the Senate Finance Committee and was eventually passed in the Senate. It was then moved to the House Committee on Energy and Commerce and on to the Subcommittee on Health by Representative Glenn Thompson (R-PA5) where it was passed. It now awaits the President’s signature.

Key Terms:

Special Needs Trust – An account set aside specifically for an individual with a disability to help pay for medical or general care needs without jeopardizing their eligibility for federal benefits.

Beneficiary – The individual with the disability receiving the benefits.

Donor – The individual who is contributing the assets to be put into the trust.